Well, I'm not a member of the Chinese central committee, so I also just assume things. But the way I see the Chinese, there is nothing without a purpose what they do. Even more so when it comes to business.
In my view, there is not much that the US can do against China. The worst thing that could happen to the US is, if China actually does what Trump demands - stopping the export of good to the US. That would cause a instant shortage of all kinds of consumer goods and a hefty inflation. Lets face it, all the countries in the western world depend - thanks to globalisation - on the supply with chinese goods. It would take years to build up a inland production again, and after that everything would be much more expensive.
So the leverage we have on China is pretty limited.
You are viewing a single comment's thread from:
I don't know if manufacturing even CAN be forced to return to the USA. However, a bit more of this kind of "trade war" talk, and many countries could start to leave China and move to other countries - other than the U.S. Spreading out Chinas' dominant position of manufacturing and exporting cheap goods would also be one huge way to take China down a notch or two in regards to the US/China trade deficit. Although that would not improve the jobs or manufacturing in the US, sometimes you can only bring somebody else down to your level in order to claim some kind of a victory. Both lose. I've seen some people say that the big winner of this trade war is going to Mexico, and I see some truth to that. Helping out Mexico certainly could, indirectly, help to ease some of the pressure on the situation with illegal immigration on the U.S. southern border.
Well, manufacturing will only return to the US, if it's cheaper than other options. And of course its not only China that is a player in this game. If China gets banned from trading with the US, there are several other "cheap" countries waiting to get a piece of the cake. Mexico can be one of them, but also India, Vietnam, Malaysia and more.
Also it not only western companies who have factories in China or elsewhere, that are the problem. Its the native companies that compete with the western companies, too.
Anyway, what ever they decide, the biggest loser will be the american consumer. If the cheap imported goods disappear from the shops, he will have to pay the higher prices. It certainly wont be the import companies, or Walmart or who ever, who will cover for the tarrifs - it gets passed along to the consumer at the end. And the same result comes from repatriation of the manufacturing.
That would, admittedly, create lots of new jobs. But the pay would need to go up to make ends meet - wich in turn causes prices to rise again. Which requires pay to go up further ect. ect.... And there is the inflation spiral.